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NEW QUESTION # 29
Which of the following is FALSE regarding G20/OECD Principles of Corporate Governance (the Principles)?
- A. The Principles state that an entity's corporate governance framework should ensure the equitable treatment of all shareholders
- B. The Principles state that an entity's corporate governance framework should encourage active cooperation between corporationfiand stakeholders in creating wealth.
- C. The Principles are required to be implemented by all corporations in the jurisdictions that have officially adopted them
- D. The Principles are intended to be applicable in both developed economies and emerging markets
Answer: D
NEW QUESTION # 30
Consistently punishing perpetrators can be an effective fraud prevention mechanism.
- A. True
- B. False
Answer: B
NEW QUESTION # 31
Which of the following is an example of organizational crime?
- A. An HR employee adding a ghost employee to the payroll and misappropriating the paychecks
- B. An insurance claims agent conspiring with customers to file false insurance claims and share the proceeds
- C. A sales manager using a corporate credit card for personal expenses
- D. Management of several pharmaceutical companies engaging in a price fixing scheme
Answer: D
NEW QUESTION # 32
To be in compliance with the ACFE Code of Professional Ethics, fraud examiners must have:
- A. An expert level of knowledge for every circumstance that might be encountered in a fraud examination
- B. A Sufficient skill and knowledge to recognize when additional training or expert guidance is required
- C. Sufficient resources to obtain the training needed to become an expert on all facets of fraud examinations
- D. An expert level of experience for every circumstance that might be encountered in a fraud examination
Answer: C
NEW QUESTION # 33
Jane, a Certified Fraud Examiner (CFE), was hired lo conduct a fraud examination at XYZ Company Her examination did not reveal any conclusive evidence that fraud had occurred or was occurring Consequently. XYZ's management asked Jane to state in her official examination report that the company is free of fraud as a means of assuring the board of directors that the company's anti-fraud controls were effective. The ACFE Code of Professional Ethics prohibits Jane from complying with management's request.
- A. False
- B. True
Answer: B
NEW QUESTION # 34
Jody has been working at ABC Corp. for ten years. He steals funds from the company and tells himself that the company owes it to him for his "unrewarded hard work and loyalty" This situation BEST illustrates which leg of the Fraud Triangle?
- A. Rationalization
- B. Perceived opportunity
- C. Lack of personal Integrity
- D. Perceived non-shareable financial need
Answer: A
NEW QUESTION # 35
Criminologist Charles McCaghy has stated that regulatory pressure is the single most compelling factor behind deviance by organizations.
- A. True
- B. False
Answer: B
NEW QUESTION # 36
Reporting known incidents of fraud to law enforcement can be an effective fraud prevention mechanism.
- A. False
- B. True
Answer: B
NEW QUESTION # 37
The Institute of Internal Auditors' (IIA) International Standards for the Professional Practice of Internal Auditing states that
- A. The internal auditor must apply the skill and care of an expert whose primary responsibility is investigating fraud
- B. The internal auditor must apply the skill and care of an unbiased, infallible audit professional.
- C. The internal auditor must apply the skill and care of an expert whose primary responsibility is detecting fraud.
- D. The internal auditor must apply the skill and care of a reasonably prudent and competent internal auditor
Answer: B
NEW QUESTION # 38
Which of the following is NOT a responsibility of the organization s board of directors?
- A. Assessing the strategy and underlying purpose of management's decisions and actions
- B. Serving as the middlemen between shareholders and management
- C. Acting as guardians of the organization s resources and assets
- D. Managing the performance of employees charged with carrying out business activities
Answer: B
NEW QUESTION # 39
Management at ABC Corp. is assessing the company's ethical tone and how it affects the organization's fraud risk. To most effectively reinforce an anti-fraud culture, management should:
- A. Create an environment in which employees feel safe challenging management's decisions
- B. All of the above
- C. Use a checklist of initiatives to make sure all the elements of a strong tone at the top are in place
- D. implement two separate sets of ethics policies, one for management and one for employees
Answer: A
NEW QUESTION # 40
Which of the following Is TRUE regarding an organization's ethics program?
- A. In designing the ethics program, management should consider whether the organization currently has any ethical leadership Issues
- B. An effective written ethics policy alone is sufficient to communicate management's ethical philosophy and serve as a comprehensive ethics program
- C. To be most effective, access to the organization's ethics policy should be restricted to employees and other Internal parties only
- D. All of the above
Answer: A
NEW QUESTION # 41
According to the authors of Crimes of the Middle Classes, all of the following factors have contributed to the rising problem of economic crime EXCEPT:
- A. The economy's increased reliance on credit
- B. The increased opportunity for wrongdoing as a result of advancing information technologies
- C. The continued pressures of a culture that rewards affluence and success
- D. The increased constraints of the regulatory environment for businesses
Answer: D
NEW QUESTION # 42
Which of the following is FALSE regarding a fraud risk assessment?
- A. The objective of the assessment is to provide an estimate of the organization s fraud losses
- B. The assessment team should consider how employees behave as part of its assessment
- C. The designation of an area as being high risk does not conclusively mean that fraud is occurring there
- D. The assessment should be used to improve employee fraud awareness
Answer: A
NEW QUESTION # 43
Which of the following is one of the components of the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) Enterprise Risk Management-Integrating with Strategy and Performance?
- A. Event avoidance
- B. Risk tolerance
- C. Review and revision
- D. Compliance
Answer: D
NEW QUESTION # 44
Which of the following is TRUE regarding corporate governance?
- A. Fraud risk management is considered to be the foundation of effective corporate governance
- B. Effective corporate governance practices are most necessary in an organization in which the owners are also the individuals responsible for setting the corporate strategy.
- C. An entity's corporate governance structure specifies the distribution of rights and responsibilities among the different participants in the organization
- D. Corporate governance's primary purpose is to ensure the accuracy of the organization's financial reports
Answer: A
NEW QUESTION # 45
Professional auditing standards suggest that auditors incorporate an "element of predictability" in the selection of auditing procedures to be performed so that they ensure the same areas are tested in the same manner during each audit.
- A. True
- B. False
Answer: B
NEW QUESTION # 46
During the course of a fraud examination. While, an employee of the ABC Corp.. approaches Blue, a Certified Fraud Examiner (CFE), and tells Blue that she wishes to furnish information in confidence. Blue also is employed by the ABC Corp. Blue should:
- A. Tell White that she will try to keep the information as confidential as possible
- B. Not agree to the request for confidentiality
- C. Agree that the information will be held in confidence, even though Blue knows it will not be
- D. Take White's request straight to ABC Corp.'s management
Answer: B
NEW QUESTION # 47
Glend
a. an internal auditor, and Brldgette. an accounts receivable clerk, have had several heated disagreements over accounting procedures and policies. Glenda has just been told that she will be the lead on the company's fraud risk assessment. During the fraud risk assessment. Glenda should:
- A. Confront Bridgette about the disagreements and discuss how they increase the department's risk of fraud.
- B. Include her disagreements with Bridgette as a factor when assessing the risk of fraud in the accounts receivable department.
- C. Have someone else perform the fraud risk assessment work related to the accounts receivable department's activities.
- D. Automatically designate the accounts receivable department as a high-risk area.
Answer: B
NEW QUESTION # 48
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